A Stock Analyst Attempts to Express the Price P of a Share

question 68

Multiple Choice

A stock analyst attempts to express the price p of a share of XYZ stock as an exponentially increasing function of the time since XYZ's initial public offering (IPO) : $p = 10 e ^ { k m }$ , where m is the number of months since the IPO. The price of a share was $10.00 at the time of the IPO and $12.80 four months after the IPO. What is the approximate value of k? Round to the nearest thousandth.

• A)0.637 per month
• B)0.062 per month
• C)3.200 per month
• D)1.163 per month
• E)16.204 per month

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